Sun Trading cuts staff, shutters options business

(Crain's) — Sun Trading LLC, a Chicago-based trading firm, cut almost a third of its 150-person workforce and shuttered its options trading business this week, Dow Jones reported Friday.

The proprietary trading firm, which laid off about 40 workers — mainly in strategy and support —will also no longer function as a market-maker on options exchanges, the newswire reported, without citing sources. Sun Trading President Bernard Dan told the newswire that the firm recently reorganized.

Mr. Dan did not return calls seeking comment.

Options trading firms have been forced to seek out riskier trades in the current market because of less overall volatility, said Mark Longo, founder of Chicago-based publication Options Insider. At the same time, the benefits for market-makers, such as having a first view of trades, have diminished as other traders bypass them, he said.

“The risk-reward ratio is very out of whack right now, and I think the Sun Trading guys realized that,” Mr. Longo said in an interview.